Fri, 28/10/2016 - 13:05
Current Issue 59
Following the global economic decline over the past decade, many analysts have forecasted a South African exit for the leading financial players, but this is certainly not true of Barclays, with its commercial property division as focused as ever on continental development
Open for Business
Writer: Matthew Staff
Project Manager: Stuart Parker
Barclays Africa Commercial Property Finance has been a mainstay of Barclays Africa Group’s supporting operations across the continent for the past two years in its current guise, and with a host of initiatives, portfolio expansions and entrepreneurial ambitions in tow, the Company’s evolution is already gathering momentum.
Providing coverage across South Africa via its ABSA brand as well as acting as a centre of excellence for in-country operations across Botswana, Ghana, Kenya, Mauritius, Mozambique, Seychelles, Tanzania, Uganda and Zambia; CPF’s primary function is as a bank offering across the retail, business, corporate, investment banking, wealth, management and insurance domains.
“The Barclays Africa CPF business was created more than two years ago to create a centre of excellence in the provision of commercial property finance services across different business segments and the African footprint of Barclays Africa Group’s operations,” affirms the CPF Africa Head, Klaus-Dieter Kaempfer.
South Africa’s Head, Mike Mortimer adds: “The business is completely self-contained with dedicated finance, legal, credit, building project management and valuations support. The frontline business team comprises specialists in the commercial, residential, affordable housing and listed property sectors; and with representation in all major regions across the country the business is ideally positioned to partner with clients in whichever property sector they choose to focus, and is also well placed to support them as their property finance needs evolve over time.”
Products include investment finance loans, development loans, mortgage backed business loans, lease discounting and vacant land, equity capital markets, derivatives, foreign exchange, transactional banking and risk management services; culminating in a turnkey service flexibility designed to facilitate the needs of all banking segments and industrial sectors.
“Our core segments of clients include those making property investments within the retail, office, industrial, residential and specialised properties sectors; and these may be listed and institutional clients, large property businesses, small and medium property enterprises, or non-property businesses,” Kaempfer notes. “Barclays Africa CPF has the resources to deliver capital to enable clients to achieve their property aspirations, has a long-term outlook, has a meaningful heritage, is a leader in the deployment of local expertise, and provides an innovative, full range of banking services.”
Head of Coverage for the rest of Africa (outside of South Africa), Selwyn Blieden adds: “We are different from most of our competitors by being both a local and international player, and by having the ability to directly serve clients in their jurisdictions with basic banking needs as well as being able to provide the products and reach of international bankers.
“There are very few ‘African major’ banks that can match our capabilities.”
Developing market intelligence
Operating on a continental scale comes with inevitable challenges with different countries presenting different levels of maturity and industry growth, and such shortfalls have been endured of late in the form of slowing economic growth rates, currency depreciations and more localised factors such as power shortages and political acrimony.
Naturally, against such a backdrop, slowdowns can be expected, but it does in turn shine a light on the levels of flexibility and internal operational excellence that a Company has to fall back on; pillars which Barclays CPF has strategically built itself upon.
“Given the foregoing trends, as well as the variable nature of the macro and micro-economies within which property investments are made, Barclays Africa Commercial Property Finance maintains a flexible approach to client service, and is structured to offer competitive, market-leading property finance solutions to clients,” Kaempfer assures. “Pursuant to this, the management of the business is geared towards providing services across all market segments.”
Mortimer adds: “We currently find ourselves in a subdued economic cycle both domestically and globally, and this is likely to remain as such for the medium to longer-term. In such times our clients tend to re-evaluate many of their proposed investments and developments, and we need to show similar restraint to them in our funding decisions.
“Property investment and development is a long-term game and this is not a time to ‘force the market’s hand’.”
Blieden continues by emphasising the importance of being able to serve a market in a state of evolution through a core portfolio of general property and transactional skills; and this philosophy has been realised in the past 12 months alone via a host of significant investments and service improvements.
On a South African note, Mortimer continues: “We have expanded our Affordable Housing franchise significantly in response to a growing demand in the market for this type of product. We have also refined our middle and back office efficiencies in order to ensure even quicker turnaround time and speed to market. We have increased headcount materially in South Africa, recruiting only the very best people in the industry.”
“We have also grown the Rest of Africa team,” Kaempfer adds. “The team has also created a Sharia-compliant Islamic Commercial Property Finance product which has been well received by clients and the market; and we have developed digital tools that assist our staff in developing market intelligence regarding property market dynamics within the different city and regions within which we provide funding.”
Appetite for diversification
A subsequent focus on client acquisition has helped in driving this level of continental preparedness and localised experience, fitting within a much-wider necessity to be seen as a global Company acting indigenously in each operating nation outside of just South Africa.
Kaempfer details: “Due to the high long-term economic growth rates in the markets that Barclays Africa Group operates in, as well as the increased appetite for diversification across Africa by our clients, Barclays Africa CPF has created a specific management focus for markets outside South Africa and is looking to grow business in these markets.
“We facilitate debt funding though in-country operations by providing best practice deal structuring services from our Rest of Africa Coverage team and also expect to grow the CPF franchise in these markets by partnering with experienced local property developers and investors.
Blieden, Head of the aforementioned ‘Rest of Africa’ domain picks up: “We have centralised Commercial Property Finance skills based in South Africa. These include building project management, valuations and deal structuring teams. These work alongside in-country teams where we have established banking operations.”
A key element of the Company’s localisation strategy is the infiltration of equally domestic personnel, realising the significance of attracting, retaining and developing world-class professionals while instilling a sense of indigenousness in the process. Consequently acknowledged as its most valuable asset, an adherence to employment equality, diversity, and business-wide inclusion is therefore paramount and is bearing fruit in the division becoming an employer of choice.
The same ethos is also applied to the formulation of key business partnerships across Barclays CPF’s jurisdiction, as Kaempfer notes: “We have a very strong banking brand and infrastructure across the African continent. We also often partner with local experts, particularly during the deal appraisal phase; these may be in the form of local property valuers, quantity surveyors and legal firms, as the case may be.
“All these services are however managed through our centre of excellence teams to ensure that our clients benefit from the highest level of standards and that best practice is replicated.”
In the past 12 months, Barclays Africa CPF’s business has grown substantially, with its largest jurisdictions witnessing a rise in new clients as an indication of the successful migration achieved by the business.
However, this forms just one facet of the Company’s overall ambitions to empower the continent which are equally driven by its corporate social responsibility commitment to ‘shared growth’.
Pillars including educations and skills, enterprise development and financial inclusion are all integrated under this wholesome banner, and in South Africa alone are evident across initiatives being carried out in Gauteng, Western Cape, Eastern Cape, and KwaZulu-Natal.
Ultimately, this dedication to social enrichment combined with an unparalleled service remit compounded by the backing of one of the world’s leading financial operators culminates in a long-term business outlook for Barclays CPF that will inevitably see the business become a leading player in its respective markets in Africa.
In South Africa, this will be achieved through a trajectory of responsible growth across strategic areas such as Affordable Housing, while simultaneously becoming an employer of choice.
As far as the rest of the continent is concerned, “there should be a deepening of property capabilities and market infrastructure in all our jurisdictions and we would want to be able to claim our part in these”, Blieden emphasises. “We would want to have seen many of our clients migrate to being more major property players and we would want to have increased our total client and asset base.”
Kaempfer concludes: “Barclays Africa CPF has developed a long-term business strategy, which has as its overall intent to become a leading provider of Commercial Property Finance in Africa.
“The business intends to increase the size and quality of assets over the long-term; in particular, the business would like to increase the contribution of its ‘rest of Africa’ portfolio, as well as to grow its funding in the affordable housing sector where there are significant opportunities as a result of rapid urbanisation across major cities throughout Africa.”